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About Tax
The recently published World Development Report 2007, which largely concentrates upon investing for human capital (Youth) is really a challenge on the part of developing nations over the world constituting 1.3 billions of young peoples. It is the lack of funds, which has enervated the country’s initiatives.
In this context the Tax is the best form of fund for making investment by a nation. The modern states are welfare states with an aim of attaining highest welfare. So from time to time the countries over the world have brought special changes in the tax structure for making it more competitive in the international front.
Tax is simply a financial burden generally collected by Government from individuals as well as the legal entities. Tax is of different types in nature. The tax Burdens, laws and practices among the countries over the world also differ.
Tax is referred as the involuntary financial charge imposed on the individuals or groups or businesses or on any legal entity by any level of the government in order to finance govt. activities. Taxes are generally levied upon property, personal assets, upon income and upon sale or purchase of goods. These taxes are levied by the state or any functional equivalent of the state with definite aim. The aim is to cover government spending, to promote stable economic growth and to lessen the inequality of income and wealth distribution. In every country several types of tax exist with different rules and regulations associated with it. But, generally taxes are classified as Direct and Indirect. Direct Taxes are those taxes which cannot be shifted by the taxpayers on someone else.
Direct taxes are levied on persons against their income or wealth. Direct Taxes include Property Tax, Income tax, Estate Tax, Inheritance Tax, Taxes on Net Worth. Indirect Taxes are those which can be shifted totally to the another person by the person actually liable for the tax payments. Indirect Taxes include Sales Tax, Excise Tax and Value-added Tax. Other than this general classification of tax, taxes can also be classified according to its’ effect on the distribution of income and wealth. Progressive Tax refers to that tax which is levied in higher rates on the people with higher income and levied in lower rate on the people with lower income. Regressive Tax does the opposite thing. Regressive Tax takes a larger percentage from the income of the low-income people than the income of the high income people. Proportional Taxes are taxes which impose same relative burden of tax on all taxpayers unlike Progressive Tax and Regressive Tax.
To get detailed knowledge on Tax, one can easily browse through the following links:
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